The United States government recently announced fresh curbs targeting the chip industry in China. Per a report by news platform Al Jazeera, this is the third crackdown on American chip business with China in three years. The latest measures include curbing exports to 140 companies, including chip equipment maker Naura Technology Group, the report underlined. It added that the new rules also hit Chinese chip toolmakers Piotech, ACM Research, and SiCarrier Technology. According to the report, new export restrictions are part of the package, which also takes aim at shipments of advanced memory chips and chips tools to China.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
The updated sanctions package includes curbs on China-bound shipments of high bandwidth memory chips. These chips are critical for high-end applications like AI training. The US has also introduced export curbs on chip making equipment made in countries such as Singapore and Malaysia. Through these measures, introduced just a few days before President-elect Donald Trump takes charge at the White House, the US aims to limit Chinese access to chips that can help advance artificial intelligence for military applications, or otherwise threaten US national security.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Stocks
AI News and Ratings That Wall Street Is Watching
14. Soluna Holdings, Inc. (NASDAQ:SLNH)
Number of Hedge Fund Holders: 3
Soluna Holdings, Inc. (NASDAQ:SLNH) engages in the mining of cryptocurrency through data centers. The firm recently announced that it had executed a master services agreement with San Francisco Compute, a company building the first real-time compute trading platform for AI. Under the deal, Soluna will provide an initial 80 NVIDIA H100 GPUs and potentially scale to 120 NVIDIA H100 GPUs, from its AI cloud infrastructure to SF Compute, enabling advanced computational capabilities for AI-driven applications.
13. POET Technologies Inc. (NASDAQ:POET)
Number of Hedge Fund Holders: 5
POET Technologies Inc. (NASDAQ:POET) designs, develops, manufactures, and sells discrete and integrated opto-electronic solutions in Canada, the United States, Singapore, and China. The optoelectronic products marketed by the firm can help convert data from electric signals to light signals to be transmitted through optical wires. This allows for higher data transfer bandwidths, lower loss, and simpler cooling needs, especially within AI data centers. On December 2, Northland analyst Tim Savageaux raised the price target on the stock to $7 from $6 and kept an Outperform rating on the shares following the company’s announcement of plans for expanded optical engine capacity via contract manufacturing partners in Malaysia. Poet also announced plans to buy in the 25% of the SPX joint venture that it doesn’t own, with both moves addressing concerns previously noted around non-China supply chains, the advisory told investors.
12. Symbotic Inc. (NASDAQ:SYM)
Number of Hedge Fund Holders: 15
Symbotic Inc. (NASDAQ:SYM) is an automation technology company that engages in developing technologies to improve operating efficiencies in modern warehouses. The AI business focuses on automating supply chain and warehouse operations. On December 2, Northland lowered the price target on the stock to $35 from $53 and kept an Outperform rating on the shares after the company announced they are delaying their 10K as they are further having to fix FY24 reported numbers and lowered Q1 of FY25 revenue guidance to 36% growth and EBITDA guidance to 75% growth.
11. STMicroelectronics N.V. (NYSE:STM)
Number of Hedge Fund Holders: 18
STMicroelectronics N.V. (NYSE:STM) makes and sells semiconductor products. The company has long-term exposure to structural growth areas such as the energy transition, data centers, and microcontrollers. On December 3, Exane BNP Paribas analyst Jakob Bluestone initiated coverage of the stock with a Neutral rating and $28 price target. The advisory expects 2025 to be a better year for European semis and believes investors should selectively buy the recent dip. Paribas believes it is too early to turn on analog semis en masse, however.
10. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 60
Dell Technologies Inc. (NYSE:DELL) designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services. It’s also a leading manufacturer of AI PCs. On December 2, Deutsche Bank lowered the price target on the stock to $142 from $144 and kept a Buy rating on the shares. The advisory updated forecasts post the company’s Q3 results. It views last week’s double-digit pull back post the results as a buying opportunity, given its view that the fundamental catalysts across the business remain intact, and are more deferred than anything.
9. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 64
ASML Holding N.V. (NASDAQ:ASML) makes and sells advanced semiconductor equipment systems. On December 3, Exane BNP Paribas re-initiated coverage of the stock with an Outperform rating and $858 price target. It is time for investors to revisit the long-term ASML story, the advisory told investors in a research note. Paribas expects the company to hit the upper end of its 2023 guidance and see 6% upside to 2030 sales estimates. ASML has the widest moat in semis and is the brains behind the brains of artificial intelligence, contends Exane.
8. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 68
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. On December 2, Oppenheimer maintained a Perform rating on the stock, noting that Intel has announced the retirement of CEO Pat Gelsinger effective December 1. While investors appreciate Gelsinger’s efforts to refocus the company, Intel continues to face myriad structural headwinds, per Oppenheimer. These include Intel Foundry process technology continuing to lag the competition, lacking meaningful external customer interest, and remaining deeply unprofitable; share loss in core server and client CPU franchises driven by lagging performance and increased competition; and lack of meaningful growth drivers as Intel has thus far missed the opportunity to capitalize on the high-growth AI accelerator market with lackluster Gaudi2/3 efforts, the advisory noted. Oppenheimer said any named successor faces significant challenges as turnaround efforts play out.
7. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. The firm recently announced that it would be partnering with computer software firm Canonical. Under the deal, the powerful edge artificial intelligence platform of the former would get an optimized build of the Ubuntu 22.04 LTS Linux distribution of the latter. The firm said that this public beta image was the first step in a roadmap that brings together Qualcomm processors and Ubuntu to give AI and IoT developers a competitive edge.
6. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor manufacturer. On December 3, news publication The New York Times reported that chip advances made by companies like AMD, as well as customer reactions to their products, were proving that credible NVIDIA alternatives were emerging. The report quoted Daniel Newman, an analyst at Futurum Group, as saying that for some crucial AI tasks, NVIDIA’s rivals were proving they could deliver much faster speed, and at prices that were much lower. He added that this was what everybody had known was possible, and now it was starting to materialize.
5. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. On December 3, finance news platform Nikkei Asia reported that Japanese electronics firm Tokyo Electron had deepened a collaboration with key customer TSM. Per the report, the former had opened a major operations center in Tainan, a city in southern Taiwan, as part of a larger plan to strengthen the chipmaking ecosystem and supply chain resilience of the Taiwanese chipmaker.
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology company that owns and runs the internet search engine Google. On December 3, the cloud division of the company announced that Veo, the AI model developed by Google that can generate video from text or images, would be available in private preview for customers via Vertex AI. Vertex AI is a Google Cloud console tool for rapidly prototyping and testing generative AI models. The tech giant further said that Imagen 3, the highest-quality text-to-image AI model offered by Google, would be available to all Google Cloud customers globally on Vertex.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. On December 3, China-based machine industrial firm ZJK Industrial announced that it had received a request to produce samples for one of the upcoming liquid cooling manifold projects from the chipmaker. The offer reinforces the position of the former as one of the select, approved vendors for NVIDIA liquid cooling systems – which have rapidly become a necessity in the industry – and highlights the capabilities of ZJK to deliver advanced solutions tailored to evolving market demands.
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Meta Platforms, Inc. (NASDAQ:META) engages in the development of products that enable people to connect and share with friends and family. On December 3, Nick Clegg, a senior executive at the company, said in a blog post that Meta AI had limited impact on elections around the world in 2024 despite concerns that generative AI would interfere with major elections through Meta apps. Clegg further noted that during the major elections this year, ratings on AI content related to elections, politics and social topics represented less than 1% of all fact-checked misinformation.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. On December 2, the company announced that it would be launching new data center components that are designed to support the next generation of artificial intelligence innovation and evolving needs. Per the tech giant, these capabilities cover data center essentials like power, cooling, and hardware design. Through the new products, the firm aims to create a more energy efficient data center. The new components offer simplified electrical and mechanical designs for data centers, as well as improved liquid cooling, rack design, and control systems.
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Amazon.com, Inc. (NASDAQ:AMZN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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